Thank you, Swapnali. Good evening and a warm welcome to all the investors, analysts, other stakeholders joining us today for the J&K Bank December 2025 earnings call.

Before starting, on behalf of J&K Bank, I wish you all a very happy and prosperous New Year. Now let me introduce my fellow colleagues from the bank's senior management, who are accompanying me on this call: Executive Director Mr.

Sudhir Gupta, Chief General Managers Mr. Sunit Kumar and Mr.

Imtiyaz Ahmad Bhat, Retail Banking Head Mr. Rakesh Magotra, Corporate Banking Head Mr.

Nishi Kant Sharma, Impaired Assets Portfolio Management Head Mr. Rajesh Malla Tikku, Chief Financial Officer Mr.

Ketan Kumar Joshi, Chief Risk Officer Mr. Altaf Hussain Kira, and our Treasury Head Mr.

Ajay Kohli. The Indian economy has continued to show strong momentum, with real GDP registering a six-quarter high growth of 8.2% in quarter two of FY25-26, underpinned by resilient domestic demand amidst global trade and policy uncertainties.

The domestic demand has been buoyed by strong private consumption during the festive season and tax rationalization measures. As per the projections of RBI and World Bank, India's economy is projected to remain among the world's fastest-growing major economies, with estimated growth of 7.2% to 7.3% in FY25-26.

India's role as a key engine of growth among global markets has been acknowledged by the World Bank in its latest Global Economic Prospects report, crediting India's resilience in helping offset the impact of heightened global trade frictions and lifting the overall growth in South Asia. In the backdrop of this improved domestic macroeconomic environment, the bank has also recorded a healthy growth in business during quarter three, with the highlight being a credit growth outpacing the system, complemented by a steady and consistent improvement in asset quality.

Our deposits have grown by 2.5% sequentially, with a double-digit YOY growth of 10.6%. Growth in advances has been recorded at 7.7% QOQ and 17.3% YOY, substantially higher than the growth of 14.5% in bank credit from 27 December 24 to 31 December 25, as per the scheduled banks' statement of position published by RBI, which is estimated at 11.7% to 12%, excluding the extended reporting period.

While the bank has witnessed a YOY growth across all categories of deposits, demand, saving and term, the accretion of CASA deposits has been much slower than the term deposits. This is in line with the broad industry trend, driven by shift towards high-yielding term deposits, along with increased deployment of funds into alternate investments, which is evident from the share of bank deposits in household financial assets falling from 40.9% in FY2021 to 35.2% in FY2025, while mutual funds have ballooned from being just 2.1% of household savings to 13.1% over the same period.

Consequently, the bank has witnessed a decline in CASA ratio, being recorded at 44.10% as on 31st December 2025. However, it is still much higher than the industry average of 37.4% for quarter two FY2026, with our CASA in Jammu and Kashmir accounting for 86.3% of our total deposits, being even better at 48.51%.

Speaking of advances now, with an above 17% YOY growth, the bank is comfortably poised to achieve the guidance of 12% credit growth for the fiscal. The growth during the current financial year has been balanced, both in terms of the contribution from geographies of Jammu and Kashmir, Ladakh and rest of India, as well as in terms of retail and corporate contribution.

Jammu, Kashmir, Ladakh and rest of India have contributed 66.7% and 43.3% respectively of the incremental YTD advance growth, with retail corporate contribution being 53.4% and 46.6% respectively. On a sectoral basis, a double-digit YTD growth has been recorded in agriculture and corporate loans, which together account for more than 40% of the bank's loan portfolio, with agriculture growing at 25.7% and corporate loan book by 14.7%.

Retail advances, constituting around 65% of our advances, have also registered an almost double-digit YOY growth of 9.4%. Within the retail book, car loans and housing loans have registered a YOY growth of 15.3% and 8.9% respectively.

In order to capitalize on the opportunity presented by reduced car prices on account of tax rationalization measures, along with the year-end discounts, bank launched a campaign of auto loans, which ran during the entire quarter and was highly successful, with our car loans growing by 10.7% QOQ and both Jammu, Kashmir, Ladakh and rest of India recording a double-digit growth. Our personal loan segment in rest of India continues to grow at a healthy rate, recording a 14.4% YOY growth, with car, housing and education loans all recording double-digit growths.

Profitability for the quarter has also improved considerably, with net profit increasing by 18.7% QOQ and recorded at rupees 587 crores, notwithstanding the industry-wide pressure on margins witnessed following RBI's cumulative rate cuts of 125 bps during calendar year 2025, combined with our bank having taken an unforeseen hit of rupees 180 crores on account of impairment provision arising from the amalgamation of RRBs and also having to provide around 68 crores, that is at 5% of the advances restructured under the Special Rehabilitation Package 2025, the bank has still been able to post a 4.5% YOY growth in its net profit for the nine months ended December 31st, 2025, which has been recorded at 1,566 crores. We have been able to improve our NIMs on a sequential basis despite a 25 bps rate cut, with NIM for Q3 recorded at 3.62% and that of nine months at 3.64%, broadly in line with the expectations spelled out in our previous call.

With the moderation of weighted average domestic term deposit rate gradually catching up with the moderation in weighted average lending rate, owing to the repricing of deposits starting to kick in, we believe the bank is on course to achieve the guidance for the current fiscal, unless there is another rate cut. We have also recorded a decline in cost of deposits and the same has been recorded at 4.69% for this quarter.

The bank continues to exhibit strong cost discipline, keeping operating costs broadly under control, despite a business growth and inflationary pressures, with just a marginal 2.8% YOY growth for the nine-month period. As a result, the bank has recorded a cost-to-income ratio of below 56% for the current quarter.

Continued improvement in asset quality, despite the challenging operating environment in the current fiscal, remains a standout achievement for the bank, reflecting sustained and effective portfolio monitoring. We are pleased to inform that we are on the brink of achieving our GNPA guidance of below 3% for March 2026, a quarter ahead of schedule, with GNPA as on December 31, 2025 recorded at 3%.

Gross slippages also continue to be under control, with annualized gross slippage ratio at 0.83% for the nine-month period and no credit costs for the nine-month period. Our net NPAs has also recorded a substantial improvement, recorded at 0.68% as on December 31, 2025 versus 0.94% a year ago, with the bank continuing to maintain adequate provision, with PCR above 90%.

In our previous call, we made a mention of the special rehabilitation package formulated to provide relief to the borrowers affected due to the disturbances in the UT of Jammu and Kashmir. Under this package, which was to be implemented by December 31, 2025, bank has rehabilitated more than 10,600 borrowers, with amount involved of more than 1,400 crores, on which bank had to take a provisioning of around 68 crores during the quarter, as mentioned earlier.

CAR has been recorded at 15%, with CET1 at 11.84%. This is without reckoning the net profits for the nine-month period, which would have incremental impact of around 145 bps.

While the bank at present is comfortably placed in terms of capital adequacy, the Board of the bank during this quarter has accorded their approval for raising equity capital of 750 crores and tier 2 capital of 500 crores. The annualized return on assets and return on equity for the nine-month period have been recorded at 1.23% and 15.16% respectively, with ROA annualized for the quarter improving to 1.35% against 1.16% for quarter 2, and both parameters well on track as per our guidance.

In the context of the system liquidity remaining constrained and evolving customer preferences for high-yielding investment avenues, the bank is revising its CASA guidance. However, this does not have any impact on our margin outlook for the current fiscal.

Market guidance for financial year 25-26: credit growth 12%, deposit growth 10%, CASA 45%, NIM 3.65% to 3.7%, return on assets 1.2% to 1.25%, return on equity 15% to 16%, gross NPAs below 3%. Despite periods of disturbances and natural calamities impacting our home territory of Jammu and Kashmir in the current fiscal, we as a bank have remained focused and disciplined in our execution.

On the strength of foundations built over the 87 years of existence of this bank, coupled with our persistent efforts, we are well placed to extend our streak of lifetime record annual profits for the fourth consecutive year, thereby achieving a double hat-trick. This remarkable feat is a testimony to the institutional strength and resilience of this bank and to the steadfast support of our customers and promoters, who have journeyed with us through every phase.

Thank you for your time today and for giving me a patient hearing. We can start the questions now.

Good evening to the team. I have two questions.

My first question is: as gross NPA has come down and gone down to around 3%, and profitability continues to improve, how do you plan to build on this credit discipline while expanding lending in segments like MSME and retail over the next few quarters? What specific steps are you taking to deepen the bank's presence in high-growth regions outside Jammu Kashmir, especially with competition intensifying from private banks and fintechs?

That's my first question. I'll ask the second question after this.

Thank you.

Thank you very much. The focus on NPA recovery has been very, very constant for the last nine quarters and more.

We have not only reduced the gross NPA in percentage terms, but also in absolute terms. This is the gross NPA that I am talking about.

If you even consider the SMA, March to December, the SMAs also have reduced by 50%. The prospect of adding NPAs is very low.

The credit cost is nil. We have continuously been engaged in NPA recovery for quite some time now.

That is one part where the discipline on recovery would continue to be in focus for us. While I mentioned that credit growth has this time been balanced between the rest of India and Jammu and Kashmir and Ladakh territories, with almost 43% coming from rest of India and 57% from Jammu and Kashmir, which is our home territory.

Similarly, the retail and corporate has also been balanced. The idea of high-potential areas has already started seeping in.

This has been the strategy of the bank for the last one year, and I believe we will continue to do that.

Thank you. I believe Mr.

Ketan Kumar also on the call today?

Ketan Joshi is there.

Yeah.

My question to you is, with net interest income slightly lower this quarter and capital raising plans underway, how are you planning to optimize the cost of funds while supporting loan book growth? Could you share how the bank is approaching Tier 2 bond issuance and equity infusion, and how these will support your medium-term credit expansion and margin stability?

Thank you.

See, the capital growth is in tandem with the business growth. It is required to supplement the business growth which we are pursuing in next two years, especially in the UT of J&K, where the government, the central government has given a lot of emphasis on infrastructure development, and that will enable the region to have a lot of credit uptake, and for which, being a lead bank in the region, we will also get that pie of credit growth.

To supplement that credit growth, we expect that we will have access, 1,500 crore of additional capital, which will take care of that business growth. That's why we are planning to raise 500 crore Tier 2 bond and then subsequently QIP.

We are also targeting QIP to be completed by 31st March; however, it may spill over a little bit based on the marketing condition. As far as cost of funds are concerned, our focus is on the retail CASA, as mentioned by MD sir.

Our focus will remain on retail CASA, and that too from the rest of India. That will definitely offset whatever cost we are adding towards Tier 2 bond.

We are going to offset, and it will help us in maintaining the adequate NIM.

If you look at the reduction of repo that has been for the year by 125 bps, while our NIMs have been affected by only 40-42 bps. We have been very vigilant about the kind of credit growth that we are doing, which are giving us returns.

In net interest margin, of all the banks have been affected because of this rate cut, but we have been able to maintain the margins, and I guess 3.64 is maybe one of the highest in the industry.

Thank you. Just a closing note, it may be a vague question, but just to understand, are you expecting any positive outcome in the budget coming soon?

See, the entire banking industry wants some relief as to how they can get back the deposits to them. I am not suggesting anything, but maybe some tax reforms can happen, which will allow the investors to think of bank deposits once again.

Most of the household deposits, as I mentioned, are shifting towards mutual funds.

Also there is a demand from CI to raise the standard deduction from 75,000 to one lakh. Probably that may be accepted by the Minister of Finance.

Thank you for the guidance, and I wish the entire team best of luck for the next quarter.

Thank you.

Am I audible, sir?

Yes, you are.

Yep. Thank you very much, sir, for this opportunity, and many congratulations for a good set of numbers.

Sir, I just wanted to check, in nine months itself we have seen a growth of around 17-18% rate. For the entire year, have we revised up the guidance of 12% that we have been saying in the last quarter?

Thank you, Deepak ji, for the compliments. In fact, I would still maintain the guidance of 12 to 15%, especially owing to the fact that there is a stress on the deposit growth.

Had the deposit growths been similar to advances growth, I would have said we would be growing at 20%. We have to maintain the balance.

The CD ratio has also reached 72%, which I had promised at the beginning of the year. I believe that maintaining this ratio, we will be comfortably placed at 12 to 15%.

In case we are able to generate the deposits which we are working hard on, then the growth can be higher, because the pipeline at the moment is very, very robust for us.

Okay. I got it.

In terms of deposit, I think you did mention that some repricing is left, right? How much percentage repricing is left, and when is expected to hit the P&L?

What I meant was the repo cut directly impacts the lending rates, while the deposit rates are contracted for a period. The shift of the moderation of deposits takes some time, one to two quarters, before it takes effect.

I had mentioned in the last call that the NIM is likely to improve by 5 to 6 basis points, because the effect of the repo cut had already passed on, while the deposit rates took some time to moderate. Now you see there has been a 6 basis points improvement from last quarter in the NIMs.

This is how it works in the industry.

Yeah. I understand that.

I was just trying to understand when this entire repricing is expected to hit. I

think by March the entire thing will be repriced,

by fourth quarter. We do expect some improvement in NIMs in fourth quarter as well, right?

Definitely. If you look at my guidance, it is 3.7.

Understood. Just one final thing, at 527, anything in terms of guidance, if you can help, that would be very helpful, yeah?

I would keep that to the next call, if you permit. Because, see, there are many factors which affect the guidance.

It will not be lower than the guidance we had for this year, assuming that there is no material change in the environment. If there is a positive change, the guidance will be higher.

If there is a negative change in the environment, it might be same or slightly lower. We will try to maintain a kind of growth that we have done for the last, say, four, five quarters.

Okay. Just one small thing, you mentioned we are working on generating deposit.

Can you throw some more light, elaborate more on what sort of steps we are taking there?

See, more than 80% of our deposits are from our home territory, and out of that almost 48-49% is CASA. We are working on this home territory of all the deposits that we may have lost in the last few quarters to get them back, and also generate more deposits through IT initiatives.

From IT initiatives I mean that using the QR code and the POS machines. Since we have a very strong presence in this geography, we are very accessible to all the vendors, traders, businessmen of this area.

This is one area where we feel that we have a very strong possibility of improving the CASA and the total deposits. Through CASA I want to improve the deposits, which will help in both the ways.

Okay. I got it.

That's very helpful, sir. That would be from my side.

Wish you all the very best. Thank you.

Thank you. Thank you very much.

Hi, good evening. I have a question.

Firstly, just looking at the provisioning line, about 70 crore of negative provisions for NPA, etc. Is there anything to read apart from the negativeness that we have been having?

The additional provisioning has happened in the standard assets. It is on account of, I mentioned, there is a special rehabilitation package that the Reserve Bank of India permitted on account of the disturbances that was created in Jammu and Kashmir on account of the 22nd April event.

I get that, sir. No, my question was why is that negative?

The provisions are...

Negative provisioning is on account of big ticket-size recovery that has happened in one of the accounts, where we have recovered almost more than 100 crores, which was fully provided for. That provisioning has got reversed.

Okay. This was not a written-off account?

That was not a written-off account. That was an NPA account, fully provided for.

Got it. Over the last few quarters, we had made provisions against Grameen Bank.

Are we expecting any reversals from the same in the coming quarters, or something that occurred this quarter as well?

I will keep that to myself at the moment. We have a strong possibility of reversal, provided that the Grameen Bank starts performing well.

It has already started performing well in the last quarter, it did well. There were some outstanding expenses which were set off this quarter.

From next quarter onwards we expect the bank to do well. It is already performing well.

The numbers are going to improve from next quarter, and eventually we expect, as per the master direction of Reserve Bank of India, we expect some reversal in these provisions also.

Okay. Just to follow up from one of the previous questions on loan to deposit ratio, it expanded to about 72% this quarter.

Is that where we expected to stabilize at, the loan deposit ratio, or we don't see much scope of improvement, unlike the rest of the system that is much higher than 72 today?

No, I am not going to stabilize at 72%. We will definitely, provided we are adequately capitalized as we are planning to be, I can expect the CD ratio to go up to 76-77%.

Okay. Just one last thing on the RIDF.

I think as on March 25, the outstanding RIDF, in the balance sheet is about 9,000 crores plus. How much is matured this year, and do we continue to invest in them to meet the PSL requirements?

I guess the entire thing is getting matured in the next four-five years, starting from next year, I think around 3,000 crores is getting matured, followed by around the same amount in the following year. If we look at our priority sector and the sub-targets, I believe, unless of course we get the final figures for the year end, I believe that we will not be required to invest any more on RIDF for the next year.

We are going to get back that amount for further investment.

This is because we don't need to invest more because we are organically meeting the PSL requirements?

Yes, organically, through PSL lending. PSL lending, along with covering all sub-targets: agriculture, marginal farmers, non-corporate farmers, all those sub-targets are also being met.

Got it. Thank you so much, and all the best.

Thank you.

Hi, sir. Thank you so much for the opportunity.

Sir, a couple of questions. Your employee expenses, on nine-month basis, they are down Y-o-Y.

For this particular year, I think will mostly be flat. Sir, for FY27 also, do you think employee expenses can remain at whatever level they are?

Can it go down, or do you see marginal increase in them?

The interest expenses depend on the interest that we...

Sir, I am asking employee expenses. Employee expenses.

Sorry. I got it wrong.

I am very sorry. Employee expenses are going down on account of retirements, right?

Yes, sir. What is the way forward?

for this year, they are going to be flat largely?

It will not be flat. It will still go down, but we have plans to recruit people.

Okay. Then if you consider the outgoing employees are high-cost employees, and the people we recruit will be at a lower cost.

Overall the employee cost will remain low. In fact, it is likely to go down further for some time.

Great. FY27, it can go down further from whatever number we report in FY26.

Yes, yes, yes.

Sir, provisions again, this nine months it is negative. Do you have any further scope of write-backs, recovery, which might prompt you to report near zero kind of provision number for next year, FY27?

I believe so. We still have quite a bit of pipeline.

I do not think that the credit cost will be anything positive by the end of this year.

No, sir, for next year, FY27. This year is anyways...

27,

at the moment I will not commit, because the near visibility is what I am looking at. FY27 might be much better, because we have certain strategies lined up for next year.

Once we are through with this year, we will be going ahead with the strategies for next year. It can be much better.

At the moment I cannot predict what will happen in 2027.

Sir, based on whatever you are telling me, I think next year we can easily do 17-18% kind of ROE, right? Because anyways even if you do at 14-15%, your expenses doesn't grow that much, maybe single digit 4-5%, and it should all flow down, right?

ROE should see an improvement, at least 200-300 basis point is what my calculation says. Anyways we are doing...

Sir, what's the need of... That is fine, sir.

What's the need of raising capital at such low valuations? We can hold on for at least one more year.

We don't need capital as of now. What's the need of diluting below book value?

See, I have plans for credit growth, which...

Sir, even if you grow 20%, you don't need capital.

I definitely need capital to be assured of.

Sir, that's my humble submission. Please do consider postponing it a bit.

We are raising capital when all the PSU banks are trading at such low valuations. Probably, when things are better, whenever we get closer to book value or higher than what we are, we should at least contemplate raising then, because it unnecessarily impacts book value, and is negative for everyone as a shareholder.

We'll think of that, definitely.

Thank you, sir. Thank you so much.

Thank you.

Hello, sir. Congratulations on great numbers.

This is Sonal Kohli from Bowhead. If you are not can I ask three questions?

Yes, Sonal ji, please go ahead.

Sir, firstly, if you can explain the contours of restructuring, that's my first question. Is it all done, or still anything else has to be done, and what impact?

I may end the first five-seven minutes of the call. What the impact, if any, you expect from it?

Or what is the level of postponement of them?

See, the last date for restructuring was 31st of December 2025, there are no further accounts for restructuring. We have done almost 10,600 accounts to the tune of 1,400 crores, and we have provided for 5% of the assets, that is around 68 crores we have provided for.

No further provision, no further accounts for restructuring, and to be very honest, these are all standard accounts. It is not postponement.

It was lifeline given. I had mentioned earlier also, the resilience of the people here is very, very strong.

I do not believe that these accounts are going to turn NPA in any time in future. I am assured that this restructuring will actually provide them a lifeline to restart and continue the business in the way they were doing it earlier.

Second, the business activity, tourism, it's all returning to this state. Gradually it has become almost normal.

Sir,

second question pertains to loan to deposit ratio. If I remember, the prior MD, been talking in bank for almost three years, and, your past markets, in our interaction.

If I remember correctly, the long-term plan is to take it to 78-80, over a three-year period, if not next one, two years. Am I missing something here, or is my understanding correct?

No, absolutely. Your understanding is correct.

We have taken it from 67-68% to 72-73% now. Along with it, there was a 10% YOY growth in deposits as well.

I just mentioned that my target would in the medium term will be to take it to around 77-78%. Beyond that, if all the regulatory compliances are in place.

I will be only restrained by the regulatory compliances, nothing more than that. Sir,

thirdly, sir, I don't know, sir, if you track the banking stocks, but I wanted to give you a perspective. The previous participant did mention about the capital raise.

If you are going to make 17-18% equity, return on equity, if you even grow at 18%, you don't need to dilute at all. I understand that, you may have higher ambitions that at some point of time you may want to grow.

To put things in perspective, Jammu and Kashmir Bank is by far— it is not cheap. It is by far the cheapest banking stock in India in absolute terms, and as compared to its ROA, despite having such a high-class advantage and leadership such as yours.

Therefore I think it will be injustice to all the shareholders, including to the management of the bank and to the government of India, if we were to dilute such a high-quality franchise at such a cheap valuation. Just to put other things in perspective, this bond raised money about two years, one month back at a 6-7% higher price than today.

After that the book value has grown immensely. As you yourself mentioned, two record years, including the last one under your leadership.

The book value next year would be around 145, adjusted book value. If you put things all in this context, if you are going to report what you have done over next two-three quarters, many PSU banks are today quoting even above book value.

You could trade at a premium to that, and that would be, I think, fair to management, board, state, and the shareholders who participated in the past fundraising. I would humbly request you to maybe, not wait forever, but maybe, let people understand your story.

Maybe go to the shareholders, go to analysts meet in Bombay, meet other fund managers, let the true price discovery happen, and I'm sure people will come in hordes to give you money. Let the, under the prior leadership, I think the IPO was subscribed multiple times.

People inferred so much of faith in the bank. If we go back today and value at lower price than what we did two years back, despite all other banking stocks having risen, it does not send the best of the message to the people.

My humble request: unless you are in desperate need, unless you think there is going to be a... planning to grow 30%, or you believe that there could be an economic shock coming in, do consider telling your story first to the street.

The money will come in no time. It's such a small amount, compared to your profits.

Your one quarterly profit would be equal to the amount of the capital raise. Just a humble request, sir.

If you can just internally deliberate, in context, if you need the data, I'll be more than happy to provide you data of the ROA of the bank versus other banks, the price-to-book multiples, the returns of the bank versus two years, and therefore why we are saying what we are saying. Secondly, I understand that you have a lot of investments which may be more valuable than the capital raise you are planning to take, whether it's stake in the insurance company, the number of housing and flats, all the value of the real estate you are sitting on.

Just a humble request to the board, and we are happy to provide you enough data to support it. Please keep that in mind.

Thank you, Sonal ji. Underlying compliments are very, very welcome.

In fact, I'm pretty very, very happy with all the compliments that you showered on the bank. I'm very, very happy for that.

Second, I have previously also and now also, I have already taken note of all the things that you mentioned and the data that you had already provided to me. I already have them with me.

Third is, we have taken a permission of the board, but the permission stands for one year. I don't think that you should be worried about it.

I do not intend to go to the market unless I am absolutely ready for it. Please don't be worried about that.

It's just that we have got an approval, and the approval stands for 12 months. We will definitely...

Maintenance approval?

Approval, we got it this quarter only. It is there for three, four quarters now.

Sir, if you go after Q2 results or Q3 results, your price discovery will happen by then.

I'll definitely keep that in mind, Sonal ji. I am absolutely sure about it.

Thank you so much, sir. Really, thank you.

Hi sir. Thank you.

Hello.

Yeah. My question is on yield on advances.

Our yield on advances has declined sharply over the last year. I understand that there has been several repo rate cuts, but the decline is very sharp.

Are we clearly undercutting or underpricing our loans? That's my question.

The yield on advances, if you look at quarter three 24-25 to quarter three 25-26, it is less than 100 bps, while the repo cut has been 125 bps. Okay?

I just want to tell you that almost 70 percent of the loan book, just slightly less than 70 percent of the loan book, is in the territory, the home territory of Jammu and Kashmir and Ladakh. The competitive rates that you are talking about, it constitutes only 20-31 percent, which is in the rest of the country.

Now even there, we are focusing a lot on retail advances in the rest of India. Rest assured, this yield on advances will not go down further, I believe.

Yes, the corporate world is looking at very, very competitive rates, but we are aware of that, and our focus has always been, as a bank, is on the retail, and we will make up for whatever loss we make—whatever low margins we get out of the corporate advances through the retail advances. That is one.

We also keep in mind that the corporate advances that we are doing have low capital charge because we are concentrating mostly on AAA-rated companies. Even if we are lending at slightly competitive rates to the corporates, they are very, very safe AAA-rated corporates.

Overall, the safety, security, and the margins we are trying to protect as much as possible. With the reducing repo rates, it's tough.

It is tough for every bank. If you look at the numbers of other banks, I believe that you will find the position of our bank much better than that.

I will not be that worried since the total reduction in the yield is less than the repo rate that has been cut during this period.

Sure, sir. Thank you.

Namaskar, sir. I hope I am audible.

Yes, yes, please go ahead.

Yes, sir. This is just pertaining to the reversal of the provision entry.

I was late to join the call. If you could just, for the sake of repetition, the line item 8 and 9, if you could just explain the nature of the same, and are we done with the provision of NPA, or more is expected, the reversal of the same going ahead?

Are you talking about reversal of provision?

Yes, sir.

Reversal of provision happened on account of a recovery in a large ticket-size loan, which was an NPA but fully provided for. 100 percent provision was there, and 100 percent recovery has come in that.

We reversed the provision which was there in that account. This is only on account of one account.

Right, sir. You were also mentioning about the hit that we have taken on account of the merger of another bank.

That provisioning is also completed. We have completed the entire provisioning on account of the impairment of the amalgamation of RRBs.

That entire provisioning has been completed in the second quarter itself. This quarter, we did not have any provision on account of the amalgamation.

Going forward, there is nothing left for provision.

Okay. Just to take into the account the core numbers, the core number stands at 780 crore as the operating profit, and then comes the provision part.

We need to focus on the 780 number itself as an operative number only. Other are only the book entry parts.

See,

operating profit is before tax is 806 crores.

Yeah. No, that takes into account the provision reversal part.

That was the question.

Yes. See, provision reversal that happens, if you look at this bank for the last three years, there has been hardly any quarter.

See, we have been so focused on recovery of NPAs that we have had provision... Last year we had zero credit cost.

This year we have had, for the nine months, zero credit cost. Provision reversal is something which has been happening with this bank because of the focus on recovery.

It's not because of any adjustments that is being made. You see, the provision coverage ratio is still above 90 percent.

We continue to maintain 90 percent, and we will not go below 90 percent. It's a healthy sign, and the NPAs have also come down to 3 percent.

Going forward, I believe for at least one more year we will have a similar situation. After that, maybe the low-hanging fruits won't be there anymore.

Then for one more year, I believe the situation will be same.

Lastly, sir, on the nature of the other income part, if we read the numbers for the last December quarter, in that quarter also the other income component was significantly higher at 242 crore, and this year it is even higher to 280. If you could just give some color on the granular details of what contributed to this and how is this line item going to shape going ahead?

See,

the other income mostly is contributed by the difference that you see. The recovery in written-off accounts has been double of last year.

Last year the written-off recovery was 24 crores; this year it is 48 crores. That is a major difference in the other income.

We have also had additional income from the card business, credit card business, which has improved it by 4 crores. We have improved the insurance commission by around 3 crores over last year, and most of the other items are almost flat.

If you look at the quarter-on-quarter improvement, there has also been an improvement of around 14 crores in the trading income for this quarter.

Right, sir. Thank you, sir.

Thank you for and all the best, sir. Sir, in the next month, in fact in the month of March, there will be— there are conferences happening when the year ends come in the month of March.

We'll hope that our management also participates, so that would give us a more leverage for a larger section of investors to participate. There are many conferences that happen on the Oberon platform.

There is one of them as Bharat Connect that happens, I think, in the month of February itself, maybe 15 days down the line. If you could just participate there, we will have a higher segment of investing community participation there, and we can showcase the story there also.

We'll be happy to participate. Thank you.

Okay. Thank you, sir, and all the best to the team.

Thank you very much.

Thank you again for the opportunity. Just one clarification, if it's possible for you to share, the last few next quarter, what kind of NIMs do you see over next one, two years?

Broad range. We understand that, no specific numbers can be given for such longer time horizon.

If some broad sense of a range to expect over a one, two-year period, if possible?

It's a question which I'll have to answer from my heart instead of my mind. See, we have been able to maintain close to 4% for quite some time.

Now 3.74 is the current nine months NIM. Next quarter ending, I think we should be somewhere—3.64.

Somewhere around 3.70 for the last year ending. This is what I presume will happen, maybe slightly better if there is no further rate cuts.

If there are no rate cuts, I believe we will be close to these numbers in future.

Sir, was there any impact of restructured book on the NIMs by any this quarter?

The impact was of 68 crores of provision only.

Nothing on the NIM side. It is —

the impact was six basis points, yeah.

Would that reverse come Q1 or Q4?

Next year,

next year Q1,

yeah. Next year Q1.

It will reverse.

Great, thank you.

Thank you.

Thank you very much. Thank you, Swapnali, and thank you all the participants for joining in today.

If there are any further questions or queries, you can definitely contact our investor relations desk. Thank you all.

Thank you from JNK Bank.